Chinese Drought and Global Wheat Prices

BEIJINGThe prolonged drought in China could affect global wheat prices note analysts in a recent BBC news article. Even though some regions of the country have seen recent snowfalls, the drought conditions have worsened, notes the Chinese Ministry of Agriculture. Chinas central bank has been offering emergency loans to help the farmers suffering the most as a result.

Food prices have been escalating in China for several months, and the continued drought conditions could cause further increases. Chinese officials have said that they have enough wheat in reserve to meet demand, and that they do not want this situation to continue to drive prices higher.

Large portions of China have had almost no rain since October. Not only has this adversely affected agricultural crops, it has caused drinking water shortages.

Forecasters have predicted that this drought will continue well into the spring.